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Grade Inflation and Education Quality

  • Raphael Boleslavsky

    (Department of Economics, University of Miami)

  • Christopher Cotton

    (Department of Economics, University of Miami)

We consider a game in which schools compete to place graduates in two distinct ways: by investing in the quality of education, and by strategically designing grading policies. In equilib- rium, schools issue grades that do not perfectly reveal graduate abilities. This leads evaluators to have less-accurate information. However, compared to fully-revealing assessments, strategic grading motivates greater investment in educating students. Although strategic grading distorts placement decisions, it can also increase graduate ability. Allowing grade in ation and related grading strategies can increase the probability that the evaluator selects a high-ability graduate.

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File URL: http://works.bepress.com/cgi/viewcontent.cgi?article=1012&context=rboleslavsky
File Function: First version, 2012
Download Restriction: no

Paper provided by University of Miami, Department of Economics in its series Working Papers with number 2012-2.

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Length: 48 pages
Date of creation: 15 Mar 2012
Date of revision:
Publication status: Forthcoming: Under Review
Handle: RePEc:mia:wpaper:2012-2
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Web page: http://www.bus.miami.edu/faculty-and-research/academic-departments/economics/index.html
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  1. Curtis R. Taylor & Huseyin Yildirim, 2011. "Subjective Performance and the Value of Blind Evaluation," Review of Economic Studies, Oxford University Press, vol. 78(2), pages 762-794.
  2. Michael Ostrovsky & Michael Schwarz, 2010. "Information Disclosure and Unraveling in Matching Markets," American Economic Journal: Microeconomics, American Economic Association, vol. 2(2), pages 34-63, May.
  3. Liad Wagman & Vincent Conitzer, 2012. "Choosing fair lotteries to defeat the competition," International Journal of Game Theory, Springer, vol. 41(1), pages 91-129, February.
  4. Talia Bar & Vrinda Kadiyali & Asaf Zussman, 2012. "Putting Grades in Context," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 445 - 478.
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